Auto loans dropped 24% year-on-year to Rs236 billion in April 2024, continuing downward for the 22nd consecutive month due to higher borrowing costs and economic constraints reduced consumer demand.
According to the latest data released by the State Bank of Pakistan (SBP), April saw a 2% month-on-month decrease in auto loans, with the amount of car financing falling from Rs239 billion in March.
Auto financing has been negatively impacted by stabilisation measures over the past two years, including high interest rates and stricter prudential rules.
The Pakistan Automotive Manufacturing Association reported that sales of passenger cars increased by 16% in April compared with the previous month, when 7,672 units were sold. However, year-on-year sales increased by 212%.
Over the 10 months (July-April) of the current fiscal year 2023-24, total passenger car sales fell by 29% to 63,000 units due to rising costs, high loan rates, increased tariffs and taxes, and a slowing economy.
Analysts attributed the decline in car financing to increased borrowing costs and general economic activity constraints.
